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How Much Do Professional Athletes Earn? Minimum Sports Salaries

You hear all the time about the multi-million dollar salaries star athletes earn every year. And you can’t watch 15 minutes of golf without hearing about how much Tiger Woods earns in endorsement contracts.

But what about the little guy? How about the left handed middle relief specialist that faces one batter a game and only pitches 65 innings a year? Or the football player that makes a few blocks and otherwise rides the bench? Or the 11th man on the basketball team whose sole role in life is to foul Shaq so he can miss a free throw? How much do these guys earn?

The quick answer… A lot. At least by my standards. The minimum salaries in each of the 4 major sports in the US continues to rise at a rapid rate. And rightly so. They have the talent that we pay to see. We wear the jerseys and hats, go to the games, watch them on Direct TV, live vicariously through the players in our fantasy leagues, and talk around the water cooler about how Lebron James is or isn’t the next Michael Jordan and whether or not Barry Bonds was a disgrace to the game. These games can’t be played without these role players, so why should the owners be the only millionaires in the stadium?

Football: $465,000 in 2017 + increases for years experience (The minimum annual salary increases $15,000 per year as part of the collective bargaining agreement).

Hockey: $650k + increases for service time.

Remember, these are the minimums, it can only go up from there!!!

More fun facts:

Baseball – Minimum Salary

The minimum salary in 2015 was $507,500. The owners have the ability to set the player’s salary for the first 3 years, then the player is eligible for arbitration where each side submits a salary proposal. If they do not agree, a 3rd party hears arguments then decides. It’s an ugly process that no one likes. After 6 years of service credit, the player is eligible for free agency. When free agency hits, anything can happen – from $600k role players to the $30 million annual contracts. The average MLB salary in 2015 was $3,386,212.

Basketball – Minimum NBA Salary

This is the most elite of the major 4 professional sports as there are only 12 active players on the roster at any given time. With fewer players, there is more money to go around per player. The NBA also has salary caps, which makes salary negotiations more interesting and allows for more creative contracts.

Football – Minimum NFL Salary

Football has the most active players on the roster, so that is a major reason why the minimum salaries are lower than the other sports. Like the NBA, the NFL also has salary caps, so you hear about players earning $6 million signing bonuses or $9 million work-out bonuses. It is amazing how many ways there are to mess with the salary caps. I would never want to be an accountant for a pro sports team! Another interesting thing about NFL pay is performance based pay, which is a pool of money that is distributed to players in a comparison of playing time to salary. In 2005 the pool of money to be split was $57 million!

Hockey – Minimum NHL Salary

Surprisingly, the NHL has the highest minimum salary for the average player. But their Collective Bargaining Agreement also puts a cap on player salaries, which the other sports do not do. There are also limitations on which players are eligible to receive performance bonuses, which is a loophole that other sports use to increase contracts without breaking the salary caps.

How Much Do Professional Athletes Earn from Other Sources?

What you don’t see alongside the minimum salaries is how much else these players earn. Every travel day is a day of per diem for the player. Their hotels, transportation, etc. are paid for and there is always food in the locker room. So for most pro athletes, this equals fun money or gambling money. It is usually paid out in cash at the beginning of the road trip.

Besides per diem, there are endorsements. Even Joe Benchwarmer? Yes, even Joe Benchwarmer. In high school we had a veteran MLB relief pitcher who worked out with us in the off-season. To respect his privacy, I won’t mention his name, but only a die-hard baseball fan would know who he is. His endorsements? Nike gave him a catalog and a special number. All he had to do is call in and place his order. He also got a $5,000 check annually. That’s just to have Nike on an MLB field during game time. He also got plenty of free gear from other companies such as Rawlings and Louisville Slugger.

On top of all that, the players get a cut of merchandising and have player card contracts with companies like Upper Deck and Topps. The money goes into a collective pool and is split among the members of the players union. Except Barry Bonds. He owns his own likeness and licenses his rights separately. I guess every profession has a diva!

Sports Pensions: Most of the major sports also have pension plans. These vary in their value. But they can be an important part of an athlete’s financial future. You can learn more about professional sports pension plans.

How Much Do Olympians Earn?

Most Olympic athletes are professional athletes, even though they have the talent to compete at a world-class level. CNN Money recently had a very interesting article about how much US Olympic athletes earn. American Olympians aren’t always state sponsored as athletes are in many countries, leaving many American athletes to fend for themselves, often competing for prize money and sponsorships just to get by. Many athletes work part time jobs or even pay out of pocket for their training and competition.

Unless the athlete is among the top ranked athletes in a very popular sport, the money just isn’t there. According to the article, only 50% of American track and field athletes who are ranked in the top ten in the nation in their event earn more than $15,000 a year in income from the sport. This is in stark contrast to athletes in some of the major sports like basketball, where they often earn hundreds of thousands or even millions of dollars per year. For many Olympians, it truly is about performing for pride and the love of the sport.

How Much is an Olympic Gold Medal Worth?

Keeping with the same theme, CNN Money had an article about the value of Olympic gold medal, which surprisingly, only contains a small amount of gold. The medals are comprised of 1.34% gold, and roughly 93% silver and 6% copper. The melt value of the materials is worth around $650. Of course, no one would melt an Olympic medal. They rarely come to auction, but when they do, they often fetch five-figure returns, or higher, depending on the athlete, the sport, and other circumstances around the medal.

In Summary: Most Professional Athletes Are Well Compensated!

Pro athletes are well compensated, but as I mentioned before, they have immense skills, they entertain, and more importantly, we are out there paying to see them.

About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his track his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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Comments

Cents You Askedsays

Great articles! I love the sports tie in to personal finance (or not so personal unless you know a pro player).

Wallllosays

I could sit on a bench…

Hanksays

Wow! What an interesting article.

Andrew @ Money Crasherssays

Pretty eye opening chatter on Olympic incomes…crazy how much they put into the sport, probably moreso than many other professional athletes who are higher paid, but don’t get much more out of it than the love of the game. Appreciate the mention Ryan!

Cherleen @ My Personal Finance Journeysays

Just like any athlete for any sport, only the “chosen and favorable ones” make millions while the rest stay on the side — benchwarmers, in other words. It is a big gamble if you want to get an opportunity at the Olympics. It should also open our eyes that a lot of college kids play sports for a scholarship, but do not turn professional afterwards.

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Editorial Disclosure: This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.